ROCKFORD — The Winnebago County Board agreed Thursday it has nearly 1 million reasons to re-examine its contract with former Sheriff Don Gasparini and partners.

By doing so, the board also agreed to temporarily put the brakes on the purchase of the former Hawk’s Nest Restaurant at Chestnut and Church streets. The board in September overwhelmingly approved paying $950,000 for the lot that has a fair market value of $175,000, according to the Rockford Township Assessor’s Office.

The county covets the property for its future use as a 72-vehicle parking lot for county employees.

“The Hawk’s Nest lot has not been closed on at this time. Although the property shows immediate and significant potential to help relieve the parking issue, we have requested, and the owners have agreed to a two-month extension of the contract, with the county paying the agreed earnest money deposit of $125,000.”

Christiansen also said there have been at least two other parties who have approached him with interest in the lot.

“Given this new information, we plan to use this extension to explore possibilities of a combine lease arrangement with other users. ... Due to the uniqueness of this property, and in order to guarantee a comprehensive evaluation, we requested a second appraisal, which we anticipate receiving within the next few weeks.”

While downtown parking remains at a premium, the county is bound by labor contracts to provide parking space to employees and had been leasing space at the city’s concourse parking deck connected to the BMO Harris Bank Center. However, much of the deck has been deemed structurally unsound and county employees lost more than 100 parking spaces in June 2012 when the city shut down access to 369 parking spaces in the concourse.

The lack of parking became more acute when the city alerted the county of its discussions to raise its leased parking fees from $22 per month to at least $60 per month, which would increase the county’s overall cost by $151,848 per year.

The former Hawk’s Nest was purchased for $630,000 in 2005 by Church and Chestnut Development LLC, which is managed by Gasparini, attorney Paul S. Nicolosi and Scandroli Construction owner Carl Scandroli. All three have given money to Christiansen’s campaign fund.

The county agreed to pay the Hawk’s Nest owners $200,000 to demolish the restaurant and build the parking lot. The remaining $750,000 of the purchase price represents the property value according to an independent appraiser.

Unlike a traditional appraisal made on value comparisons of similar properties, the Hawk’s Nest lot appraisal was based on hypothetical conditions — how much the property would be worth if it were a commercial parking lot leasing spaces at $53 per space, per month. That’s the rate the county currently pays for parking. The appraisal further assumes the owner can earn $15 per space by charging rent during more than 70 events at the BMO Harris Bank Center each year.

Page 2 of 2 - “We were under the impression they do this all the time,” finance committee chairman Ted Biondo said after the meeting.

“It would be like if I made my home a bed and breakfast. Because of the (projected) income, rather than the $140,000 it’s worth, they give me $525,000, because eventually, you’ll make income on that bed and breakfast. I thought that was how it was done in business, but apparently not.

“So we’re going to change that process to make sure we have all the information beforehand.”

The board has sold $3.8 million in bonds to pay for the $950,000 Hawk’s Nest transaction, a $1.2 million acquisition of the Rosecrance Ware Center and its 105 parking spaces, $800,000 for manufacturer Excelsior’s building and improvements to its property, $6,000 for a small lot south of the Criminal Justice Center, as well as other capital improvements.

The two-month extension on the closing of the Hawk’s Nest deal is not expected to impact the other projects.